Why Day Care for a Child Under 4 Costs More Than College

Thursday, Nov 17, 2016

To understand some of the difficulties facing America’s families today, you need to examine only one shocking data point: Day care for a single child under age four costs more than college and just about the same as monthly rent. At least that’s according to a recent report by the New America Foundation.

I’ve spent a lot of time writing about how average salaries don’t support purchase of average-priced homes across the country, why inexpensive starter homes are disappearing and how that’s driving Americans nuts.

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But young parents have it even worse. The New America Foundation report laid out the stark statistics:

• The average cost of full-time care in child care centers for all children ages zero to four in the U.S. is $9,589 a year, higher than the average cost of in-state college tuition ($9,410).

• In four states — Kentucky, Montana, Oregon and Wisconsin — the cost of full-time care is more than the median rent in the state. In 11 states—Idaho, Illinois, Iowa, Kansas, Massachusetts, Michigan, Minnesota, Ohio, South Dakota, Vermont, Washington — and the District of Columbia, full-time care is greater than 90% of the typical cost of rent.

• Full-time infant care in centers ranges from a low of $6,590 in Arkansas, about 15% of median income, to a high of $16,682 in Massachusetts, where it costs one quarter of the median income.

• Full-time in-home care costs range between $25,774 a year in Wisconsin and $33,366 a year in Washington, D.C.
Consider now that these data points reflect the costs of a single child — families with siblings see those numbers rise accordingly.

For parents of the 12 million kids in America who are too young for kindergarten, the numbers simply don’t work.

Brigid Schulte, author of the New America report and director of the advocacy group’s Better Life Lab, had something perhaps even more shocking to say about her data: It isn’t new.

“Child care costing more than college … it’s not like that’s a new statistic,” she said. “The Economic Policy Institute had it, for example. But it just doesn’t seem to sink in.”

In my discussion of what I believe to be the broken housing market, I have often cited data showing that housing prices have risen far faster than incomes, which shouldn’t happen in a normal market. Prices of goods should rise roughly in line with the amount of money chasing after those goods. This disconnect, which has many causes, is the source of much strife for American families.

Child care is an equally broken market, and perhaps with even more dire consequences. While families are paying exorbitant prices to provide care for their children, child care workers barely earn more than the minimum wage. This contributes to high turnover — workers sometimes leave for more pay at fast-food restaurants, Schulte said — and quality issues.

“There’s a lot of misunderstanding out there … It’s about bodies. About labor costs. To have a high quality infant care, you need a ratio of 1:4. For toddlers, 1:6. Compare that to a kindergarten teacher who might have 1:12, or an elementary school teacher who might have 20 or even 30 kids,” she said.

While some large child care providers that contract with corporations earn decent profits, the punishing mathematics of child care mean most outfits are mom-and-pop operations clinging to thin profit margins. It’s a recipe for stress.

“We are subsidizing child care on the backs of paying low wages,” Schulte said. “We are limping along in this system where we pay the least we can [to workers], and the vast majority of child care in America is mediocre at best. And a portion of it is dangerous.”

In such an ad-hoc system, parents understand well the stress of finding day care for their kids. But a different study suggests they don’t understand its shortcomings. NPR, the Robert Wood Johnson Foundation, and Harvard T.H. Chan School of Public Health released survey results earlier this month showing a stunning disconnect about perceptions of child care quality. Far more than half of parents in the NPR poll (59%) rated their child care as “excellent.”

But experts think otherwise. The National Institute of Child Health and Human Development Study of Early Child Care and Youth Development, for example, found in 2006 that less than 10% is “very high” quality. Other expert studies have come to similar conclusions.

This could be simple confirmation bias at work — once parents find a child care solution for their families, they nearly have to believe it’s good. Other data in that study suggest why. When asked for the reasons they chose a child care provider, “location” ranked highest at 27%, with “cost” at 18%. “Trustworthy” was mentioned by 20% of parents. “Well-trained providers” was only 12%.

Families of young children are sensibly prioritizing getting through the day.

The fragility of the arrangement is clear from the study as well. A routine, occasional illness can put the family income in peril. Three out of four employed parents faced with a sick child said they had to miss work, and nearly half (47%) said it had an impact on their job. Of note: Mothers are more than three times more likely than fathers to stay home when a child is sick.

The study’s authors say that has more to do with work flexibility than gender, but traditional views on gender also play a role.

America’s seeming stubborn refusal to deal with the child care crisis has roots in such gender issues, Schulte argued. From the first efforts to establish early childhood programs in the 1970s through today, there’s been reluctance for the government to subsidize efforts that would encourage women to leave their young children for work, she said, or to challenge the traditional breadwinner-homemaker family structure. But that debate has been overtaken by reality: A majority of kids grow up in households where all parents or guardians work, in all regions of the country, the New America report said.

Schulte argued Americans need to think of early child care as education; plenty of studies show critical brain development occurs in the years before public school kicks in. Studies show kids who show up behind on the first day of kindergarten often don’t catch up to their peers, she said. While the wealthiest families find a way to pay $10,000-per-child bills for high quality child care, most of America cannot.

“There is no education in the U.S. that is not subsidized — even private education is subsidized — except early childhood,” she said. “But we have to think of that as education … that is the time your brain is developing the fastest.”

Americans need to consider the broad consequences of kicking the issue down the road, she said.

“What we have now is a crazy patchwork, a fragmented unsustainable system that is a factory for inequality,” she said. “We are creating inequality from the very start. The achievement gap that shows in high school … can be traced back to the gap on the first day of kindergarten. Those zero to five years are really critical.”

Surprisingly, this year’s otherwise incendiary presidential election season gives Schulte a glimmer of hope. Both Donald Trump and Hillary Clinton have talked about the need for family-friendly policies such as parental leave. That might mean America is finally primed for a national discussion on early childhood issues.

“This brings up a very deep-seated argument about the role of government in the U.S.,” she said. “But there is a sea change right now in that both the Republican and Democratic candidates are saying the government should be involved in child care.”